Thursday, January 22, 2004
Copyright © Las Vegas Mercury

Backstory: Harrah's, the Horseshoe and history

By Michael Green

As the ridiculous ruckuses over Michael Jackson and Britney Spears show, Las Vegas is an intersection where unimportant history is made. But sometimes more important history is made in ways we don't realize--in this case, at the intersection of Second and Fremont, where Harrah's is buying Binion's Horseshoe.

Bill Harrah was one of the most important gaming entrepreneurs ever. He came to Reno from California in the mid-1930s, bought a small bingo joint and built an empire. His Reno club was first class, and he added resorts at Lake Tahoe. He was among the first to grasp the importance of big-name entertainment. Eventually he became the first Nevada casino owner to take advantage of the Corporate Gaming Act and put his operation on the New York Stock Exchange.

Harrah died before establishing a foothold in Las Vegas. From the 1940s to the 1960s, this was largely organized crime country. Many operators started out in Prohibition providing illegal booze and everything from gambling to prostitution. Some came here to practice their trade legally and be recognized as the capable businessmen they certainly were--and some continued skimming in friendlier confines.

Benny Binion came to Las Vegas hoping to avoid trouble. Whatever happened in Dallas in the '30s and '40s, chances are he was involved. When, as he put it, his sheriff was defeated, he piled his family and money into his car and moved here. After a few years in the Las Vegas Club, he moved to the Horseshoe.

It wasn't always Binion's Horseshoe. For a time, Binion was, as they say, away at college. Then it was Joe W. Brown's Horseshoe, and old-time operator Doby Doc Caudill watched the count. After Binion returned, the license wasn't in his name. Nor did he own the building. It belonged to descendants of the Silvagnis, an old Las Vegas family who ran the Apache Club there.

Binion didn't fit the profile of the average Las Vegas casino operator. Many who built the Strip and downtown were Jewish or Italian. Binion was a Texan, bigger than life, much like his home state. As the years rolled by, Binion often seemed connected to illegality--a more than friendly acquaintance of Meyer Lansky with a few odd murders tied to the Horseshoe. But he became the local all-knowing grandfather who completed graduate work at the school of hard knocks--some of which he administered--and lived to dispense wisdom to everyone from Steve Wynn to Bob Stupak.

One of those he helped was fellow Texan Claudine Williams, who operated clubs back home. When she wanted to learn the local business, who better to ask? She and her husband, Shelby, then ran the Silver Slipper. Howard Hughes bought it from them, apparently because he hated the neon slipper atop the marquee. They moved up the road and built the Holiday Casino Center Strip with other investors.

Eventually, she sold the property, though not to Bill Harrah. But it later became part of Harrah's, then a growing but still comparatively small gaming company. From its base in Nevada, it expanded into one of the nation's largest, most respected gaming corporations (and let it be added, both the company and Williams have been good citizens, donating money to worthwhile causes).

That expansion happened not just nationally, but locally. Most experts agree Harrah's never has been interested in downtown and wants the Horseshoe name and access to the World Series of Poker--and entree into the big-money poker market, where it has been lacking. Nor does it hurt the company's public relations to be the savior of jobs and a legendary casino property in the heart of downtown.

Harrah's has made unusual moves before. It bought the Rio, which appealed to a vastly different market than the company was used to. Harrah's bought the Showboat--not for the local property, which was in trouble, but for the Showboat's successful Atlantic City casino and gaming monopoly in Sydney, Australia. It sold the rest, as some think it ultimately will do with the Horseshoe.

A historical oddity took place amid the ado over the Horseshoe. Amid the downtown news, the R-J published a small obituary about a "hotel casino executive" named Joseph Kelley, who deserved more attention. He happened to be the longtime former chairman of the Showboat. Several leading operators were involved with the Showboat over the years--Moe Dalitz's group from the Desert Inn ran the casino when it opened in 1954, three generations of Houssels played a role in it, Jackie Gaughan was on the board and Frank Modica succeeded Kelley as boss.

That displeased Kelley, who oversaw the move into Atlantic City, but the board apparently felt his time had passed. So, it turns out, had the Showboat's. It's now the Castaways and it's having financial problems--as it has for many years.

While history, unlike a columnist, doesn't repeat itself, it has a way of being connected in ways that often go unnoticed. Like the Showboat and its successor, Binion's ran into financial trouble, perhaps because it was poorly operated. That isn't true of Harrah's. What remains to be seen is whether Harrah's, and downtown, will reap the benefits.